Gerlach Wants Answers About How Much Health Care Proposals Would Cost Pennsylvania Taxpayers

Press Release

Gerlach Wants Answers About How Much Health Care Proposals Would Cost Pennsylvania Taxpayers

U.S. Rep. Jim Gerlach (PA-6th District) and six Pennsylvania House Republican colleagues sent a letter Thursday to Pennsylvania Acting Welfare Secretary Harriet Dichter requesting an estimate on how much the House and Senate health care bills would cost the Commonwealth.

Both the House and Senate versions call for major expansions in Medicaid eligibility to cover more low-income residents. The National Conference of State Legislators pegged the cost of the expansion at about $2.2 billion over the next 10 years, but neither the Congressional Budget Office nor Pennsylvania officials have provided estimates.

A deal known as the "Cornhusker Kickback" slipped into the Senate version would exempt Nebraska from the Medicaid expansion while taxpayers in Pennsylvania would be forced to pay higher taxes or cuts in services.

"The taxpayers of Pennsylvania deserve this very basic information about what kind of burden the health care proposals will have on family budgets and state services," Gerlach said. "Piling more costs onto Pennsylvania's precariously-balanced budget will have real consequences for our residents. Last year, the budget was 101 days late and we were the last state in the nation to enact a spending plan because of a $3 billion deficit. And the budget is already projected to have at least a $450 million shortfall this year. That's why it is critical to have as much information available as possible on these health care proposals."

The congressman has been working to give the public access to negotiating sessions on the separate health care bills and has alerted Gov. Ed Rendell and other elected officials about the possible fiscal impact the bills would have on the Commonwealth.

Here is the full text of the letter Gerlach and other Pennsylvania lawmakers sent on Thursday:

January 21, 2010

The Honorable Harriet Dichter
Acting Secretary
Pennsylvania Department of Public Welfare
Health and Welfare Building
P.O. Box 2675,
Harrisburg PA 17105-2675

Dear Acting Secretary Dichter:

While we may not all agree on the best way to reform America's health care system, we share the belief that it needs to be improved. One thing that national health care reform must not do is bankrupt state budgets. As Congress prepares to vote on a final health care reform package, it is critical that we understand how these policies could impact the Commonwealth's budget.

As you know, both the House and Senate have passed measures that will require states to expand Medicaid eligibility. H.R. 3962, the proposed Affordable Health Care for America Act, passed by the House would require each state to increase Medicaid enrollment levels to 150% of the federal poverty level. The federal government would cover 100% of the cost of coverage to Medicaid enrollees in 2013 and 2014, but the Commonwealth would be responsible for covering nearly 10% of the cost in 2015. In the bill that was passed by the Senate, H.R 3590, the proposed Patient Protection and Affordable Care Act, would expand Medicaid eligibility to individuals with incomes up to 133% of the federal poverty level, and the federal government would cover 100% of the cost through 2016. However, the Senate legislation singles out three states -- Nebraska, Vermont and Massachusetts -- to receive additional federal funds to offset the cost of the newly eligible Medicaid beneficiaries that will be passed onto states. Therefore, it appears that the Medicaid expansion in both the Senate and House measures will lead to an unfunded mandate for the Commonwealth's budget.

Unfortunately, the Congressional Budget Office (CBO) did not provide state-by-state estimates of the cost of the Medicaid expansion for H.R. 3962 or H.R. 3590. Because we will be asked to cast a vote on a health care reform bill currently being negotiated by Leadership in the House and Senate and the Obama Administration, we believe it is necessary to know what financial burden this Medicaid expansion is going to place on Pennsylvania. In light of our state's budget shortfalls and constitutional requirement for a balanced budget, we are requesting that you share with us any estimates or calculations that the state has conducted to determine the short-term and long-term budgetary impact a Medicaid expansion will have. Additionally, please indicate how the Commonwealth will finance its share of the Medicaid expansion when it will no longer be fully financed by the federal government. Would our state be forced to either raise taxes or make deeper reductions in other areas such as education or public safety to maintain the Medicaid program?
As Congress is moving swiftly with merging the House-passed and Senate-passed bills, we hope you will give our request appropriate consideration and will reply in the very near future. We look forward to your response.

Sincerely,

_________________________ _________________________
Jim Gerlach Charles W. Dent
Member of Congress Member of Congress

_________________________ _________________________
Glenn Thompson Bill Shuster
Member of Congress Member of Congress

_________________________ _________________________
Joseph R. Pitts Todd Russell Platts
Member of Congress Member of Congress

_________________________
Tim Murphy
Member of Congress

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